Executive Briefings

Future Forces Facing Global Supply Chains

By: SupplyChainBrain 03.12.2015

Jade Rodysill, principal in the supply-chain practice of EY, details the challenges that supply-chain managers will face in the coming years. He also talks about the requirements of a great leader, and answers the question "Is there a 'best' supply chain?"

There is still a lot of uncertainty in markets today, Rodysill says. Reputational risks, and the possibility of disruptions caused by activist shareholders, "are not going away."

"We're definitely seeing a tight return on capital," he said. Investors are insisting on a maximum two- to three-year payback above the weighted average cost of capital.

In addition, companies continue to be challenge by the issue of talent management. Many lack the necessary depth of expertise, and are finding it difficult to attract and retain the right individuals. The biggest gap, Rodysill says, is in the area of middle management.

A big item on supply-chain leaders agendas today is the need to concentrate on process as opposed to functions – the ability to break down siloes between transportation, warehousing and manufacturing. At the same time, companies are focusing “relentlessly” on simplifying their supply chains, instead of attempting to be “all things to all people.”

In the area of risk management, the trend is toward greater complexity. In many companies, risk assessment continues to be a separate activity from business planning. “Integrating that more into the discussion tends to help,” says Rodysill. “It allows you to see data and visualize scenarios.”

He recommends that companies adopt more of a process orientation, to tear down departmental siloes. They need to create an order-to-cash discipline that flows through discrete functions, he says.

There is still a lot of uncertainty in markets today, Rodysill says. Reputational risks, and the possibility of disruptions caused by activist shareholders, "are not going away."

"We're definitely seeing a tight return on capital," he said. Investors are insisting on a maximum two- to three-year payback above the weighted average cost of capital.

In addition, companies continue to be challenge by the issue of talent management. Many lack the necessary depth of expertise, and are finding it difficult to attract and retain the right individuals. The biggest gap, Rodysill says, is in the area of middle management.

A big item on supply-chain leaders agendas today is the need to concentrate on process as opposed to functions – the ability to break down siloes between transportation, warehousing and manufacturing. At the same time, companies are focusing “relentlessly” on simplifying their supply chains, instead of attempting to be “all things to all people.”

In the area of risk management, the trend is toward greater complexity. In many companies, risk assessment continues to be a separate activity from business planning. “Integrating that more into the discussion tends to help,” says Rodysill. “It allows you to see data and visualize scenarios.”

He recommends that companies adopt more of a process orientation, to tear down departmental siloes. They need to create an order-to-cash discipline that flows through discrete functions, he says.